It is easy to get carried away and full of enthusiasm when you come across a dental practice for sale that seems to check all the boxes on your list. But without a well-thought-out plan, it may all be for nothing. So, what should you consider before putting in an offer?
In a recent blog post, we reviewed some of the many nuances you should consider when you sell your dental practice. But what about when you want to buy? As a law firm dedicated to helping you in all stages of your dental career, we are equally committed to helping you purchase a dental practice as we are to helping you sell. So, here are three often overlooked suggestions that you should consider once you find that practice that feels like the right purchase for you:
Assemble Your Team Now
It cannot be stressed enough that if you are serious about taking the next step in owning your own dental practice, you need to think about who will be advising you and helping you with your purchase. There are many considerations involved with such a large and often complex transaction, and you need the right team to help you navigate it from the beginning. Many people are caught off guard when they realize just how much collaborative work amongst different professionals goes into a dental practice purchase. These professionals can include accountants, bankers, and of course, an experienced dental lawyer, to name just a few.
Bringing in your professional advisers one at a timeas many first-time purchasers do can often lead to disjointed communication and, in worse cases, costly delays. For instance, connecting your lawyer with your commercial banking team will enable them to help you navigate the many moving parts of the financing process so everything will be in place in time to close your purchase.
Ensuring your team is in place will help you not just during the transaction itself. Having professionals experienced in dental practice transactions involved right from the beginning of your search can help you review appraisals, compare various sale listings, come up with essential questions for the seller, and prepare a formal offer to purchase that winning practice. And showing the selling dentist that you have already prepped yourself and your team will add credibility to your offer and can give them a boost in confidence in your potential to be the right buyer of their practice.
Ask The Right Questions
Most dental practice sales will include an opportunity for you to see the practice and check out the office and equipment in person, often in the form of an open house. By the time this opportunity rolls around, you’ll want to have done your homework. Read the appraisal? Check. Know the basic metrics of the practice? Check. Prepared a list of follow-up questions with your team? Check and check.
Instead of losing the forest for the trees, however, a savvy purchaser will use this opportunity to shift their focus from nitty-gritty details in an appraisal to understanding what is and is not important to the selling dentist. Yes, you read that right. Our experience has shown time and again that the best transactions are about more than just the numbers and technical practice details. A buyer who puts themselves in the vendor’s shoes will be able to ask the right questions before making their offer and therefore be more likely to position themselves ahead of everyone else who may be vying for the same practice. Some suggestions of compelling questions that you should ask at the open-house stage are:
Why does the selling dentist want to sell?
The motivations behind a sale can change which aspects of the deal may be more flexible. For example, if the seller hopes to retire soon, they may balk at a lengthy post-sale associateship. However, in other circumstances, they may be willing to stay on and help you ease into your new role as a practice owner.
Does the selling dentist own multiple practices?
From a big-picture point of view, even if this current opportunity does not pan out, presenting a clear and informed offer could mean that the seller will keep you in mind for another one of their practices.
Are you potentially interested in owning more than one dental office? Buying from and working alongside someone with multiple practices could help set up more deals down the road.
What is included in the sale?
If a seller wants to hold on to certain assets, could you live without them? For instance, if they control or own the real estate which houses the dental practice, are you being given an option to buy the building (if not now, then in the future)? Similarly, if the practice is in a strip plaza or condo unit, does the lease allow for expansion of the space?
Not being shy about facing key issues head-on (such as leasing, staff, excluded assets, etc.) will help you put together an offer you won’t end up regretting.
It is often overlooked, but a personal touch can go a long way in breaking down walls and getting buyers and sellers comfortable with each other. One of the top issues we see facing buyers and sellers in a transition is uncertainties about fit (in terms of personality types, dental philosophies, competencies, etc.). If you feel that you are genuinely the right dentist to take over this practice, you should not shy away from telling the seller why that is. And this will require you to ask another important question – “Why do I want to buy this practice?“.
Arguably, this is the most important question for any buyer, yet it is often disregarded. Any dentist who has previously attended a DMC open house would have found that we are just as interested in you as a good fit for the seller as you are in vetting the seller. Being transparent about your plans for the practice, who you are and what your practice philosophy is can do wonders to establish that essential early rapport with the selling dentist. And including this in an introduction or a cover letter with your offer is a little-known secret that can help clarify for the seller why you are the one to take over their business.
Many factors go into deciding which dental practice is suitable for you. And when you think you have found the right one, the important thing is that you’re willing to do what it takes to make smart decisions about this next step in your career. Hopefully, this post has provided you with some valuable tips to mull over that you may not have considered before.
Whether you’re new to the market or have been looking for a while to find your ideal dental practice, you can always contact us for a free consultation. Not only can we represent you when we are not already representing the seller within your dental practice purchase, but we can also connect you to other professionals in the dental industry who can assist you with your purchasing goals. If you have any questions specific to your circumstances or would like to discuss putting in an offer for your dream practice, DMC can help. Send DMC an email or call us directly at 416-443-9280 at any time.